Dispute Resolution Senior Associate, Ben Hartley looks at the ACCC’s recent announcement to target the Construction, Forestry, Mining and Energy Union through Federal Court proceedings alleging a secondary boycott at various building sites around Melbourne, as well as the ACCC’s other priorities in 2015.
In its Interim Report tabled in Federal Parliament on 19 December 2014, the Royal Commission into Trade Union Governance and Corruption criticised the legal system for not protecting Boral following a CFMEU ‘black ban’ on Boral as part of an on-going dispute between the CFMEU and Grocon Pty Ltd. The legal system was, according to Commissioner Hayden, “fundamentally defective” with the defects being “so great as to make it easy for those whose goal is to defy the rule of law.” The secondary boycott provisions set out in the Competition and Consumer Act 2010 were also noted as possibly being ineffective at deterring illegal secondary boycotts by trade unions.
Parallel to the Royal Commission, the ACCC had been investigating the alleged conduct of the CFMEU and prior to the Interim Report being tabled in Parliament, issued proceedings in the Federal Court of Australia against the CFMEU on 20 November 2014 for breaches of the secondary boycott provisions of the Competition and Consumer Act 2010. This claim has been described by the Chair of the ACCC, Mr Rod Sims, as the “biggest secondary boycott case the ACCC has ever taken” and is listed for trial in September 2015 for a period of six weeks.
The proceedings against the CFMEU and the comments made by Commissioner Hayden in the Interim Report have prompted the ACCC, in outlining its priorities in 2015, to vow to take on the CFMEU and to invite businesses to come forward and talk to the ACCC about secondary boycott activity. The driver of the proceedings is, according to the ACCC, the damage to the economy by way of lessening competition. The State Secretary of the CFMEU is alleged to have said, “We are at war with Grocon and in a war you cut the supply line” and, accordingly, it will be of interest to businesses, particularly in the construction industry, to see how the Federal Court deals with the breaches of the secondary boycott provisions alleged. The proceedings against the CFMEU may see the union face up to $10m in fines, with union officials facing penalties of up to $220,000.
The ACCC will also target misconduct by big business in 2015 following a claim against Coles in 2014 that resulted in the imposition of a $10m fine for engaging in unconscionable conduct when dealing with their suppliers. The success of these proceedings is seen by the ACCC as an important benchmark that can be applied to other sectors beyond the supermarket sector. The ACCC did indicate that it would be monitoring Telstra’s revised deal for the construction of the much maligned national broadband network to ensure that Telstra do not get an anti-competitive advantage.
The ACCC also indicated that during 2015 it would be carefully monitoring a wave of state government privatisations this year, including in relation to electricity networks, to avoid a scenario where assets are sold for a high price but done so in a way that lessens competition and drives up the cost of services to the consumer.